The Covid 19 pandemic has brought forth unprecedented challenges and has put most of us in an unchartered territory. While the health and economic crisis around the world continues to loom, technology is playing a crucial role in managing our daily lives. Grameen Foundation India in collaboration with FinTech for Inclusion, a not for profit initiative by Piyush Singh came together to organize a webinar to discuss if India is truly ready for financial inclusion, and how technology is facilitating that.
Most professionals working in the microfinance sector seem to agree that only when poor people are made part of the mainstream financial systems, they can get access to credit, exercise goal-based savings leading to investments, buy assets and insurance to protect themselves financially. Sunil Kulkarni, Chief Business Mentor at Oxigen says “While the Jandhan accounts were widely successful, the number of ATMs are simply not enough for everyone to use their accounts effectively, therefore disrupting the last mile in many ways. This also brings forth another point that digital payments are important so that there is no hoarding of cash”
In the last decade, India has taken many strides towards financial inclusion. When the first Global Findex Database was released in 2011, only 40% of adult Indians had a bank account, which increased to almost 80% by April 2018.
90% of India’s 1.3 billion population at present have a unique Aadhar identity, 330 million new Jan Dhan bank accounts have been opened. Mobile phone penetration is expected to reach 90% by 2020 and post demonetization, the use of digital payments is rising significantly. But the journey to financial inclusion is still a long one. Prabhat Labh, CEO at Grameen Foundation India makes a case for last mile agent networks, like Grameen Mittras that Grameen Foundation has promoted to drive inclusion. Ensuring viability of these models remains a key challenge however.
Ashish Anand, Co-Founder & CEO at Whrrl brought agriculture and SMEs into focus and says “70% land owners are small and medium farmers and only 20% SMEs today get credit from the formal credit sector. Technology as a resource is available but the adoption hasn’t taken place”
The adoption of digital payment tools and services is confined largely to urban areas, and the rural hinterland continues to suffer because of low penetration of smartphones, lack of trust in adoption of new technologies and other socio-cultural barriers. Mukesh Bubna, Founder at Monexo FinTech believes that education will drive financial inclusion. Small finance banks have a lot of scope to tap the rural markets. Business that can talk to their customers in their vernacular language will be able to build successful networks.
With the advent of Covid 19, there is a suddenly an increased awareness about health insurance. The health crisis is leading to behavioral change amongst Indians that would drive adoption of insurance. Anand Kumar Bajaj, Managing Director & CEO at PayNearby feels that, “insurance can’t be sold, it needs to be mandated, like an injection. We all need to gift insurance to our loved ones”.
Today, owing to the lockdown most businesses are on a standstill. Millions of workers in the informal economy are out of jobs. Anand Bajaj advocates for immediate TDS(Tax Deducted at Source) refund to the SMEs. This move can make businesses viable and ease liquidity pressure. Better regulations can emerge if the regulators interact with the practitioners”.
Prabhat Labh adds “we as a society need to also inculcate a culture of giving. Not for profit organizations will have to create innovative business models to reach the last mile who are at present the hardest hit and vulnerable to life shocks. Grameen India’s Covid 19 response aims to provide unconditional cash transfer to 6,000 poorest of the poor families in Bihar and Vidharba region of Maharashtra. Grameen has built a mobile application for end to end process management right from beneficiary identification to enrollment to cash transfer and monitoring in a transparent manner.”
This webinar was held on the 18th of April, between 11 am – 12 pm. Panelists included Anil Bhardwaj Vedram, Co-Founder and CCO at Payswift & Dr. Anar Rupji, Sunil Kulkarni, Chief Business Mentor at Oxigen, Prabhat Labh CEO Grameen Foundation India, Anand Kumar Bajaj, Managing Director & CEO at PayNearby, Mukesh Bubna, Founder at Monexo FinTech, Ashish Anand, Co-Founder & CEO at Whrrl
The panel was be moderated by Arti Singh, Assistant Editor at Economics Times, Prime.
About Grameen Foundation for Social Impact (GFSI)
Grameen Foundation for Social Impact is a leading social impact organization, working to help the poorest people, particularly women through financial inclusion and livelihood development. GFSI is a not for profit company registered under section 8 of the Indian Companies Act. Donations made to GFSI enjoy the tax benefit under section 80 G of the Income Tax Act.